One of the major issues around the cryptocurrency markets is the fact that it’s so new, and many regions and governments have very different opinions and perspectives on regulation. For example, there are companies such as Malta, that want to embrace blockchain technology to become a potential hub of innovation, and there are also countries such as India and China, who are threatened by the fact that it could pose a threat to fiat currency.
It appears as though Malaysia is letting it be known to potential cryptocurrency criminals that they will not be lenient whatsoever. In fact, the country is warning that those who engage in fraudulent activity in the sector might face some serious jail time. Essentially, they would be violating securities laws, which means the country has ruled that cryptocurrency tokens are securities.
About The Announcement
The announcement was made by the country’s financial watchdog, also known as Securities Commissions Malaysia, or the SC. The agency also announced that the law was already in effect, starting January 15.
The press release also elaborated that they were targeting initial coin offerings (ICOs), which many in the community believe has prevented large institutional money from flowing in, because of the amount of fraud and exit scams in the space. Those who are either offering an ICO, or operating an exchange, outside of the approval of SC, now face up to 10 years in prison and a RM 10 Mil fine (equivalent to about $2,434,800 USD).
Not Against Crypto
The Finance Minister, Lim Guan Eng wanted to be clear that this did not mean that the country was “against” cryptocurrency, simply that it wanted a clear regulatory framework. Eng stated that “digital assets” and “blockchain technologies” have the “potential to bring about innovation in both old and new industries.”
Regardless, others might disagree, considering that it is clear that the country wants to regulate the industry the same way that it regulates securities. The Finance Minister hopes to establish clear regulation by the first quarter of 2019.